AOL's New Email Certification Program: Good Mail or Goodfellas?

Note: On Feb. 3, 2006, AOL reversed its decision to phase out the Enhanced Whitelist and require senders to pay GoodMail for its certification program.

Bethesda, MD (February 2, 2006) – AOL®'s recent decision to require payment of "a fraction of a cent per message" to ensure delivery of email messages with images and links to AOL mailboxes threatens to cut off Internet communication at its very roots, potentially spelling the end of an era of near-free mass communication and making good email marketing practices obsolete. This as-yet unspecified fee is to be paid to email certification company Goodmail SystemsTM. Founded in 2003, Goodmail, according to its Website, "provides a new class of e-mail that identifies good mail ... so the messages can be delivered to recipients' inboxes – not junk or bulk folders." Until June 2006, senders that are unwilling or unable to pay the per-message fee will be able to continue to use AOL's Enhanced Whitelist service. After that, it's time to pay (Goodmail), or face a future of relegation to the junk folders of millions of AOL mailboxes. To accelerate the migration to Goodmail, AOL will begin reducing the number of Enhanced Whitelist participants in April.

AOL's implementation of Goodmail's CertifiedEmailTM service, announced January 30th, was greeted with sharp criticism from email service providers and marketing experts. L-Soft, the company behind LISTSERV®, the product that launched the email list management industry 20 years ago, is one of the few potential beneficiaries of AOL's move, since its customers would have no options but to purchase the necessary software upgrade to support Goodmail certification, an upgrade that L-Soft could choose to license on very profitable terms. Yet there are no sounds of champagne glasses clinking to be heard in L-Soft's boardroom.

"When I read about the AOL-Goodmail deal, I first thought it must be a hoax," says L-Soft CEO and founder Eric Thomas, who invented LISTSERV in 1986. "I know a lot of good people at AOL, people I admire for their patience and professionalism in dealing with the spam plague, on which AOL spends more time, energy and money than anyone else. I just cannot imagine them as the cast of the IT industry's version of "Goodfellas," selling senders protection against a destiny of junk folders for 'a fraction of a cent per message'. Somehow, something has gone terribly wrong."

"The fundamental flaw in AOL's new certification plan is that there is only one technology supplier. Coupled with AOL's dominance in the marketplace, this creates a de facto monopoly. Once the system is in place, nothing would prevent Goodmail from raising prices to increase profits. Higher certification prices would lead to lower email volumes and reduced operational costs for AOL, so they would be unlikely to complain about any such increases."

Goodmail Chairman, CEO and Co-Founder Richard Gingras was noted to say that Goodmail expects that its charter program will provide significant discounts to senders through 2006.1

"This could be seen as just another way of saying that Goodmail is already planning to raise prices in 2007. And price is not the only concern. As the sole provider, Goodmail would also be in a position to censor senders, with or without reason. Thus, nobody would dare to criticize Goodmail or complain about price increases," Thomas says. "At the press of a button, Goodmail could put companies out of business by blocking their access to AOL. People would have no option but to pay up – and keep their voices down."

With only one supplier, only one pricing model is being offered – in this case, a per-message fee that should deliver a steady growth rate to Goodmail as the Internet grows. Other Internet necessities, such as domain names and SSL certificates, are typically priced at a flat fee, allowing people and organizations at most income levels to establish a substantial online presence.

"If VeriSign® started charging for Web certificates by the click, people would be crying foul, and VeriSign does not even have a monopoly," Thomas says. "A per-message fee will eliminate non-commercial email traffic, such as the hundreds of thousands of discussion lists that serve as online communities for millions of people – for example, lists connecting people who are struggling with cancer, coping with parenting special-needs children, or simply wishing to exchange tips about their favorite breed of dog. You end up with a situation where, if your non-commercial newsletter is successful, it is driven out of business by the Goodmail fee, and you have to turn it into a commercial venture just to survive. In order to be acceptable to the community, the certification process must be available for a reasonable fixed fee and from a choice of several certification providers."

Discussion communities such as the award-winning international Association for Cancer Online Resources (ACOR) are also speaking out. "In essence, this is going to block every AOL subscriber suffering from any form of cancer from receiving potentially life-saving information they may not be able to get from any other source, simply because a non-profit like ACOR – which serves more than 55,000 cancer patients and caregivers every day – cannot afford to pay the fee. There must be a better solution," says Gilles Frydman, ACOR's President.

Thomas concludes, "While I have the deepest sympathy and understanding for the situation AOL is in, the introduction of the Internet's first email tax ever is simply not the right solution to the spam problem."

About L-Soft

L-Soft, which was incorporated in 1994, is the company behind LISTSERV®, offering email list and opt-in email marketing software and hosting services for managing email newsletters, discussion groups and marketing campaigns. L-Soft's products deliver about 30 million messages a day to more than 110 million list subscriptions. L-Soft celebrates the 20th anniversary of LISTSERV® in 2006.